Which of the Following OM Strategy/issues Should a Firm with a Product

question 109

Multiple Choice

Which of the following OM strategy/issues should a firm with a product in the maturity stage of its life cycle be LEAST concerned with at the present time?

• A) increase capacity
• B) long production runs
• C) standardization
• D) cost cutting
• E) fewer rapid product changes

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Definitions:

Fixed Costs

Expenses that do not change with the level of output or sales, such as rent, salaries, and insurance, essential for budgeting and financial planning.

Marginal Costs

Marginal costs refer to the additional cost incurred by producing one more unit of a product or service.

Avoidable Costs

Costs that you get back if you shut down operations.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials or labor expenses.